Attempts to revive the two mines have been floundering because of apparent disagreements between business rescue practitioner Rob Devereux and the creditors.
Lily Mine has not been operational since three workers - Solomon Nyirenda, Pretty Nkambule and Yvonne Mnisi - died after the surface of the mine caved in when an underground pillar collapsed in April 2016.
Following the incident, Lily owner Vantage Goldfields SA put the mine in business rescue. Its sister mine, Barbrook, also fell into financial distress.
The creditors sought a third-party opinion on the business-rescue process. In a letter on July 23, the unnamed third party cast doubts on the integrity of the business-rescue process. The report said most funders were unwilling to be involved in re-starting mining operations.
“Funders would far prefer a simple structure for the distressed asset, as regulated in a provisional liquidation scenario,” it said.
It said a new business-rescue process looked set to fail, because it was not based on a proper due diligence. It warned of a legal tug-of-war if the new process was approved.
“The creditors and the community will be the ultimate losers in this scenario,” it said.
Dwaine Koch, a representative of the Barbrook creditors, yesterday declined to identify the author of the report.
“We felt that we needed a third-party opinion,” he said.
In a letter to Devereux, Koch yesterday said he should explain how the business rescue practitioners secured R190million funding from the Industrial Development Corporation (IDC) without submitting audited financial statements as part of their application.
Earlier this year, the Siyakhula Sonke Empowerment Corporation said it had secured the IDC loan to acquire a 74percent stake in Vantage Goldfields SA.
“It remains a fact that to date we have not been privy to any proof that the IDC indeed approved a loan to the amount of R190m.
“We are currently advised that the agreement is private and confidential and shadowed by third-party confirmations,” said Koch.
He said Devereux should also elaborate on a claim that he had secured R320m to reopen the two mines and pay creditors.
He also accused the business rescue practitioner of undermining the mines’ social and labour plans.
“We kindly remind you that you cannot ignore the social and labour plan.
“The social and labour plan is the second-most important document on any mine which captures the undertakings and values made to the community in return for your mining licence to be approved,” said Koch.
Attempts to obtain comment from Devereux yesterday were not successful.